GO ONLINE FOR COMPANY
INFORMATION

By Suneel Udpa, Saint Mary's College of California

Services provided by accountants are fast expanding beyond traditional accounting, auditing, and tax services to include new and challenging functions within organizations and within society. These functions include management consulting, strategic planning, litigation support, merger and acquisition consulting, special investigations, financial planning, and operations and general management. As this trend continues, an accountant is faced with an ever-increasing need for current information on companies as a means to obtain significant competitive advantage. Online databases provide a wealth of up-to-date information quickly and at a relatively low cost. Information available from online databases include financial reports on public and private companies, directory information, company news, credit reports, Federal and state filings, and analysts' reports.

The Online Search

It is useful to work out your search strategy before logging on and going online since many business databases have a high connect charge once the use is logged in. There are a multitude of choices and decisions to be made relating to the online vendor, the database producer, and the appropriate search words. The biggest challenge facing online researchers is not how to structure a search and choose the appropriate search words, but how to identify the best database in which to run that search.

There are many factors to consider when choosing an appropriate database. The first factor you must consider for a company search is to determine the market status of the company you are researching, i.e., whether the company is public (or "listed" or "quoted") or private ("unlisted" or "unquoted"). If you are uncertain, use a database that includes both public and private companies.

Next, determine the type of information you are looking for. Business databases can be (i) bibliographic (providing references), (ii) full-text, (iii) directory, or (iv) Numeric (containing tabular information). For example, if you are looking for factual information on companies, organizations, and products such as company addresses, phone numbers, financial, and marketing information, you will choose directory databases. Also, if there is a deadline for the information, you might choose full-text databases, which present the entire text of published articles, instead of bibliographic databases. In choosing a database, it is important to determine how current the information needs to be. If you need very current information, choose databases that are continuously updated. For example, newswire databases contain unedited full-text news releases from over 10,000 diverse news sources that are updated at 15-minute intervals or less throughout the day. When accessing business databases for financial information it is important to check the date of the financial data to determine how recent the information is. Latest earnings or sales figures, management changes, stock prices, etc., can be obtained through company news databases.

Finally, cost considerations can determine database selection. Cost varies across different online vendors providing similar databases and across different databases containing similar information. For example, the Disclosure database is available on Dialog, Lexis/Nexis, and Dow Jones News/Retrieval. Much of the company financials available on Disclosure is available on other databases such as NAARS, SEC Online, and Moody's Corporate Profiles. Databases providing company information of interest to an accounting professional can be characterized as those that specialize in--

* company directory and financial information, and

* company intelligence (including news).

There are several databases available to accountants looking for information on companies both public and private.

Public Companies

For public companies (i.e., those traded on an exchange), all of the data submitted to the SEC, such as annual reports, 10-Ks, 10-Qs, 20-Fs, and proxy statements are available and are repackaged in various different ways by different database producers. Material filed with the SEC is also available on the Internet from the SEC's home page. In addition to SEC filings, some databases, such as Media General Plus, Moody's Corporate Profiles, and Standard and Poor's Corporate Descriptions Plus News contain interim reports to shareholders, news releases, prospectuses, and reports filed with regulatory bodies. When you need the most complete financial data on a specific company, it will be necessary to gather data from several databases. Also, it is useful to compare financial information from multiple sources to verify accuracy. If your need is to identify companies meeting certain financial criteria specifically or in ranges such as companies with beta coefficients over one or companies with over $100 million capitalization in the steel industry, you should tap into databases with searchable numeric fields.

Private Companies

Finding data on companies that are not publicly traded can be difficult since they are not subject to the reporting requirements of the SEC. Another challenge in searching for information on private companies is that private companies do not have a ticker symbol. Since company names are not standardized, several variant spellings and names of the company may appear in a database.

If you are looking for financial statements for privately owned companies, D&B­Dun's Financial Records Plus is the database to tap into. It provides up to three years of comprehensive financial statements for over 650,000 private companies. For credit information on U.S. businesses, the dominant suppliers are Dun and Bradstreet and TRW. For directory information on U.S. private companies, several files are available: D&B­Dun's Electronic Business Directory, D&B­Dun's Market Identifiers, and American Business Directory. If you are searching for information on small private companies that are not listed in the directories mentioned above; nonprofit organizations; or companies and organizations that are dissolved, bankrupt, or merged, you should consider databases containing information from public records filed with state and county offices such as INCORP (containing corporate and limited partnership records) and LIENS (containing UCC filings). A summary of databases containing private company information is listed in Exhibit 2.

Company/Industry Intelligence

Accountants can vastly improve their capital budgeting and short-term managerial decisions, company financial statements and industry analysis, and content of their managerial reports if they have the information advantage. Online databases offer accountants and managers a valuable resource for specific company and industry intelligence and research. They provide financial and market research reports, coverage of the latest business developments, and performance snapshots of markets and industries. Some of the databases providing such information are described in Exhibit 3.

In addition, there are several databases that include information from industry and trade newsletters and journals. Two are described in Exhibit 3.

Finally, newspapers, news magazines, and newswire services offer a valuable source of information about developments and market and economic conditions affecting companies and industries. Of course, the advantage of news and newswire databases is the timeliness of the news content: most newspaper indices are updated daily, while many newswire indices are updated every 15 minutes. Also, many of these databases are full-text which can be searched either using the COMPANY field or using ticker symbols. All online vendors carry a comprehensive list of news and newswire databases.

Online searching provides a quick, cost-effective tool to access company information. It is difficult to be fully knowledgeable about all the different databases and online service providers available in the marketplace today. Online searchers should select two or three of the comprehensive business online service providers such as DIALOG [(800) 3-DIALOG], Dow Jones News/Retrieval [(800) 522-3567], or Mead Data Central, Lexis-Nexis [(800) 227-4908; also available through the AICPA]. These providers cover more than 90% of all company and business databases useful to accounting practitioners. Online searching is an invaluable resource for accounting professionals striving to meet the needs of their expanding profession. *

Editors:

Paul D. Warner, PhD, CPA

Hofstra University

L. Murphy Smith, DBA, CPA

Texas A&M University

EXHIBIT 1

Newsletter Database contains full-text articles from over 500 business and trade newsletters covering nearly 50 industries, subject areas, and eco-political regions. Newsletter Database provides searchers with important information on company activities, new products and technologies, changing market conditions, and government policies, as well as expert projections, analyses, and commentaries on market events, industry issues, and business trends.